Fortifying Capital in the Age of Far-Right Geopolitics: Defense and Infrastructure Plays in a Divided West

The rise of far-right populism across Europe and North America has redefined geopolitical risk, creating a fracturing transatlantic landscape. With Donald Trump's re-election in the U.S. and the consolidation of power by Poland's Law and Justice Party (PiS) and Hungary's Fidesz, a new axis of "patriotic" economic policies is emerging—one that prioritizes defense autonomy, energy sovereignty, and resistance to "woke" regulations. For investors, this shift presents a compelling opportunity to profit from sectors directly aligned with these regimes' agendas, while navigating the risks of escalating trade conflicts and political instability.

Defense Contractors: The New Safe Haven

Poland's defense spending has surged to 4.7% of GDP in 2025, nearing NATO's 5% target, while Hungary's cautious military modernization underscores a broader regional arms race. Both countries are repurposing EU recovery funds—originally earmarked for green projects—to build dual-use infrastructure, such as roads capable of transporting troops and advanced missile systems.

Investment Theme: Defense contractors benefiting from this spending boom include:
- Polish firms like PGZ (Polish Military Industry Group), which supplies armored vehicles and drones.
- European players such as Leonardo (IT: LDO) and Hensoldt (part of Airbus), which are expanding Eastern European partnerships.

Risk: Overreliance on EU funding could backfire if Brussels enforces sanctions over democratic backsliding.

Energy Infrastructure: Betting on Autocratic Alliances

Hungary's pivot to China and Russia has made it a hub for Belt and Road Initiative (BRI) projects, such as CATL's €7 billion battery gigafactory near Debrecen. Meanwhile, Poland's "Kashubia" green industrial district blends renewable energy with military logistics, ensuring energy independence from Russian gas.

Investment Theme:
- Chinese-linked firms like BYD (SZ: 002594) and CATL (SZ: 300750), which are embedding themselves in Central Europe's EV and battery supply chains.
- Nuclear energy plays such as Orlen (WSE: OLEN), investing in Baltic nuclear power to counter Russian dominance.

Risk: U.S. sanctions on Chinese tech or EU antitrust actions could disrupt these partnerships.

Tech Resistance: The "Woke" Dividend

Far-right governments are weaponizing opposition to corporate social responsibility (CSR) and "woke" mandates to attract capital. Hungary's ban on Pride events and Poland's restrictions on gender education have created a regulatory environment attractive to firms rejecting ESG compliance.

Investment Theme:
- Data security firms like Palantir (NYSE: PLTR) or Palo Alto Networks, which cater to regimes demanding "patriotic" cybersecurity solutions.
- Traditional industries such as coal and oil, shielded from green regulations in Poland and Hungary, offering stable cash flows.

Risk: Reputational damage and consumer boycotts could pressure firms aligning with authoritarian regimes.

The Calculus of Risk and Reward

The transatlantic far-right's agenda is a double-edged sword. While Poland and Hungary offer growth in defense, energy, and tech, their policies invite geopolitical volatility:

• Short-term risks:
• EU sanctions could freeze infrastructure projects.
• U.S.-China trade wars may disrupt supply chains.

• Domestic backlash over austerity could destabilize governments.

• Long-term upside:

• Defense autonomy reduces reliance on Western allies.
• Energy sovereignty insulates against Russian gas blackmail.
• Regulatory divergence creates arbitrage opportunities for firms avoiding ESG costs.

Invest Now: A Playbook for the Far-Right Era

1. Overweight Defense Stocks: Allocate to firms with contracts in Poland's €1 trillion defense package and Hungary's border security upgrades.
2. Go Long on BRI-linked Tech: CATL and BYD's dominance in EV manufacturing positions them to profit from autocratic trade corridors.
3. Short ESG Funds: Capitalize on outflows from firms pressured to align with "woke" regulations, while investing in sectors like coal that thrive under anti-green policies.

Conclusion: The New Geopolitical Dividend

The transatlantic far-right's rise is not just a political shift—it is a tectonic economic realignment. For investors, the sectors thriving in Poland and Hungary's "patriotic" economies are clear. While risks loom, the rewards of positioning early in defense autonomy, energy sovereignty, and "woke-resistant" tech will outweigh volatility for those willing to navigate the new order. The question is not whether to act, but how swiftly to capitalize on the far-right's geopolitical playbook before it reshapes global markets forever.